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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Thursday, 16 February 17
IF I PLAN TO UNDERTAKE A CHARTERPARTY WITH AN UNFAMILIAR ENTITY, WHAT STEPS CAN I TAKE TO ENSURE THE CHARTERER WILL PAY THEIR HIRE? - SHIPOWNERS' CLUB
KNOWLEDGE TO ELEVATE
Due to the difficult conditions currently existing in the shipping market, particularly in the offshore sector, Members a ...
Wednesday, 15 February 17
SHIPPING MARKET INSIGHT - INTERMODAL
Looking at the state of the Dry Bulk market exactly a year ago, there is no doubt that there is a significant improvement and despite the fact that ...
Tuesday, 14 February 17
OPTIMISM HAS STARTED TO SLOWLY FLOW BACK INTO THE DRY BULK MARKET - GEORGE LAZARIDIS
Optimism has started to slowly flow back into the dry bulk market, with many in the market showing renewed optimism as the Pacific basin starts to ...
Monday, 13 February 17
COMBINED COAL SALES OF BUMI RESOURCES ROSE TO 87.7 MILLION TONS IN FY'16; UP 10.6 PERCENT Y/Y
COALspot.com: Combined Coal Sales of Bumi Resources rose to 87.7 million tons in FY’16 compared with 79.3 million tons in FY’15. ...
Monday, 13 February 17
THE FREIGHT MARKET CONTINUED TO TUMBLE IN FEBRUARY
COALspot.com: The Freight market was continued its downfall in all segments except Panamax for the week ending 10 February 2017.
The Balt ...
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- The University of Queensland
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
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